Small Town Strategy
By James Beatty, NCS International
Last month I talked about four strategies one could employ in choosing a
new location for your call center. To refresh your memories, those were
Small Town, Hub and Spoke, Urban/Inner City and Global. This month I will
focus on the Small Town strategy and in subsequent months on the other
strategies. The Small Town strategy is one in which you make a decision to
focus your search efforts in areas or regions that are less than 50,000 in
population. For argument's sake you could increase the number to 100,000,
but the fundamentals in rationale remain the same.
Ever heard of Hays, Kansas, population 17,767 with 7,770 families? How
about Aurora, Nebraska, population 3,810 with 1,588 families? Surely,
Sandpoint, Idaho, population 7,000 with 2,451 families! Come on, Camden,
Maine, population 4,022 with 2,010 families! Does Dodgeville, Wisconsin ring
a bell, population 3,882 with 1,573 families? Okay. Where is Woodward,
Oklahoma, population 12,340 with 5,616 families?
Well, Sykes Communications, SITEL Corporation, Coldwater Creek Catalog,
MBNA Credit Card, Lands' End Catalog and Mutual of Omaha, respectively,
sure have. They each have their call center, customer service or
headquarters operations in these communities. I have also had the pleasure
of having visited each of these communities in my travels as a site
consultant.
Take a look at the following chart:
Community |
Population |
Call
Center |
#
Employees |
Hays, Kansas |
17,767 |
Sykes Communications |
500 |
Aurora, Nebraska |
3,810 |
SITEL Corporation |
100 |
Sandpoint, Idaho |
7,000 |
Coldwater Creek |
320 Corporate HQ |
Camden, Maine |
4,022 |
MBNA Credit Card |
550 |
Dodgeville, Wisconsin |
3,882 |
Lands' End Catalog |
400 |
Woodward, Oklahoma |
12,340 |
Mutual of Omaha |
500 |
With 500 employees in a town of just under 18,000, it means that 1 in
every 35.5 persons works for Sykes in Hays, Kansas. In Aurora, 1 in every 39
worked for SITEL (the teleservices operation is now owned and operated by
Hamiliton Communications and is no longer affiliated with SITEL).
One in 22 in Sandpoint works for Coldwater Creek. An astounding 1 in
every 12.7 people in Camden works for MBNA. Try 1 in every 9.7 working for
Lands' End in Dodgeville and 1 in every 25 working for Mutual of Omaha in
Woodward.
Why are these call centers located in these small communities? To be
balanced, I should note that in each of these communities, the population
figures increase if you drive 15 to 30 miles. In some cases even doubling or
tripling, but still not even coming close to what many would consider to be
metro areas, which is my point. While many call centers are located in metro
areas, it is not an absolute necessity to do so unless there is a unique
skill set required, such as persons having a Ph.D.
These communities and their surrounding areas consistently display the
kind of attributes any reasonable employer needs in order to grow: first, a
loyal workforce with minimal competition from similar employers; and second,
reasonable costs of doing business, especially in wages and salaries. While
not one to sell the workers short, I must point out that in a 100-person
call center where just 50 cents an hour can be saved in wages in a small
town market versus a metro market, over $1,000 annually per worker can be
saved, resulting in almost $100,000 a year to your company. How much effort
would your firm have to expend in order to produce an additional $100,000 in
new revenues? This kind of saving cannot be ignored!
What about the cost of space? Try $10 or less per square foot annually,
which is not hard to find based on my experiences. How much is space in
larger metro markets? Conservatively $15 to $20 per square foot. Obviously,
annual savings of 33 percent and higher can be realized. This adds up
quickly. If your operation uses just 10,000 square feet, I would figure the
savings at $50,000 to $100,000 annually, and on a five-year lease, that
amounts to $250,000 to $500,000! That could pay for a lot of phone charges.
Speaking of telecommunications, many of these small towns have services
that would rival and/or equal their metro counterparts. Yes, fiber optics,
SONET rings, digital switching and DS1 through DS3 provisioning are
available because in many cases the telecommunications service is provided
by a company that is locally owned and the owner, president and general
manager are all available and anxious to serve you. In many cases their home
number is even on their business card. Your operation becomes one of their
larger if not largest users overnight. Many of these hometown
telecommunications companies will even help you lease your call center
equipment, hardware, software and even the workstations. They will work
closely with the economic development organization serving the area, which
will save you more money in lower interest rates and favorable terms, making
more operating dollars available to run the operation.
Remember that in these communities having 50 to 100 employees or more
makes you a major employer. The economic case for these communities can be
made in quantifiable measurable terms, which must lead you to consider these
areas.
Is every small town a candidate location for your next center? Absolutely
not! I can only hope that you will consider many more of these small towns
now than you would have last month.
E-mail me with your questions, comments and experiences at [email protected]
and I will respond personally or in future articles. Also, for the latest
information on call center locations, visit www.callcentersites.net.
James Beatty is president of NCS International, Inc., which
specializes in corporate site selection, community analysis and marketing.
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